British American Tobacco Backs Outlook; Says U.S. Investment Driving Momentum -- Update

Dow Jones12-11

By Michael Susin

British American Tobacco backed its targets for 2024 and said it expects second-half revenue growth to accelerate.

The FTSE 100 tobacco group on Wednesday said it is on track to deliver low-single-digit organic growth in revenue and adjusted profit from operations for 2024.

A company-compiled revenue consensus for the year stands at 26.25 billion pounds ($33.53 billion), with adjusted operating profit expected at 12 billion pounds.

The company said second-half revenue growth is expected to improve from the first half, mainly driven by increased sales in the new-category and combustibles segments.

Positive momentum is being supported by its investment in U.S. commercial actions, despite a challenging macroeconomic backdrop and changes in the amount of stock that wholesalers are holding, it said.

It added that it is benefiting from robust pricing across all regions.

However, the company warned that U.S. industry volume is down 9% due to persistent macroeconomic pressures and the impact of illicit single-use vapor products.

British American Tobacco said it is on track to deliver operating cash flow conversion in excess of 90% again in 2024.

"I am confident that we will deliver an improved underlying performance as we move from investment to deployment in 2025," Chief Executive Tadeu Marroco said.

Regarding the financial impact of the settlement of a decades-old litigation in Canada, the company said it expects to have more clarity about it in February, when it will provide guidance for 2025.

The cigarette maker--which houses the Kent, Dunhill and Lucky Strike brands--also backed its midterm expectations as it continues to anticipate 2026 organic revenue growth of 3% to 5%. The company also said it expects adjusted profit from operations to grow by a mid-single-digit percentage, on an organic constant-currency basis.

BAT said it continues to progress toward its goal to become a predominantly smokeless business by 2035.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

December 11, 2024 02:54 ET (07:54 GMT)

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British American Tobacco Backs Outlook; Says U.S. Investment Driving Momentum -- Update

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